New era for web names set to launch

A new era of web site naming begins tomorrow, when internet policymakers start accepting applications for hundreds – perhaps thousands – of new domain name extensions such as .hotel and .paris.

The Internet Corporation for Assigned Names and Numbers (ICANN) will launch its program for new generic Top-Level Domains on January 12 (January 13 , AEDST), with applications due three months later on April 12 (April 13, AEDST).

Experts say the new gTLD program represents the biggest change to the internet’s naming system since 1998, when ICANN itself was formed.

“It’s a significant change,” says Fred Felman, chief marketing officer for MarkMonitor, which provides online brand protection services to US corporations including FedEx and DuPont. “It’s probably the biggest change since the first expansion of the internet, from a small number of registries to 23 registries.”

Today, domain names are available in 280 domains, including generic terms such as .com for commerce and country codes such as .de for Germany.

Around 220 million domain names are registered worldwide, according to Verisign’s Domain Name Industry Brief published in December 2011. The original domain for business –.com – continues to dominate, representing around 100 million of all registered names.

“I’m thinking that the number of new domains will be in the 1,000 range….So we’re talking about a 5X increase in the number of available domains,” says Roland LaPlante, senior vice president and chief marketing officer for Afilias, which operates .info, .org and 13 other domain name registries. “I think the biggest change is in adjusting consumer behaviour and generating trust in these new TLDs.”

ICANN’s controversial plan to add hundreds of new domains has been in the works for six years.

ICANN has run two previous efforts to expand the Internet domain name space: once in 2000, when it added seven extensions including .biz and .info; and again in 2004, when it added eight more extensions such as .asia and .jobs. None of these new domain name extensions has been a runaway success.

If ICANN’s latest attempt to expand the domain name space succeeds, it could fundamentally change the way domain names are used. Among the new categories of domain names that are expected to be approved include: internationalised domain names in non-English language scripts; geographically oriented domains for cities and regions; domain names tied to specific interests; as well as domain names tied to individual companies and brands.

“The innovation is going to be in the name itself and the way it gets used from a marketing standpoint,” LaPlante says. “Most of the applications are pretty plain vanilla technically. There will be some eligibility verification that will be interesting and useful. There will be some registry services that will be offered that aren’t available today. But most of the new registries will operate the way they do today.”

The biggest innovation in the new gTLDs is likely to be internationalised domain names, which can support non-English language characters such as Arabic, Chinese and Cyrillic in the domain name extension. This means that companies selling their products overseas will be able to purchase domain names for their brands that are 100 percent in native language character sets such as simplified Chinese.

“There is a very large need for people who don’t read and write and speak in our language to be able to operate the web in their native languages,” Felman says. “This is going to be helpful for the very fast-growing population of Chinese users. It’s good for the internet at large.”

ICANN is forging ahead with its controversial new gTLD program despite concerns from U.S. government officials and corporations that it could drive up the cost of defensive name registrations for trademark owners while increasing confusion for online consumers.

Many corporations with large portfolios of domain names dread ICANN’s new gTLD program because they expect it will increase their costs for defensive registrations, cybersquatting-related litigation and advertising to prevent consumer confusion.

“Each new gTLD has brought new issues with trademarks, people squatting on their names and has introduced costs for them in terms of defensive registrations and remediating issues with cybersquatters,” Felman says. “The rights protection mechanisms that are proposed for the new gTLDs are probably not an extraordinary amount of additional protection. So they continue to be concerned about a rising cost structure.”

U.S. corporations have only a few weeks to decide if they want to apply for their trademarks as domain name extensions. The process is complicated: Applicants have to provide extensive business plans, financial statements and technical documentation about how they will operate their new domain name registry. The application fee is US$185,000.

A few pioneering U.S. companies – include accounting firm Deloitte Touche and computing giant IBM – have indicated they will apply for their company names as TLDs.

But experts say many e-commerce firms are working behind-the-scenes to prepare their new gTLD applications.

“We have had a large number of calls from major companies that may be protesting on the front side about this program, but they are covering their bases on the back side. They will be prepared to apply within the window,” LaPlante says. “We see companies in the retail space…and we see some banks and other financial services companies. Anyone with a major brand that is particularly prone to counterfeiting on the web is looking at this.”

LaPlante says there are two benefits for corporations to operate their own domain name registry. First, they can increase cybersecurity protections by controlling use of the domain and adding new features such as DNS Security Extensions, which prevents web site spoofing. Secondly, they can increase awareness of their brands by marketing their online presence around their own names, rather than around a generic extension such as .com.

“Most consumers are already familiar with major brands. So they may trust purchasing a watch online from a store that has a .rolex domain name than they would a store with a .com name,” LaPlante explained.

ICANN is expected to make its first awards for new gTLDs by the end of 2012, with new extensions becoming operational on the internet in 2013.

Initial awardees are likely to be the least contentious names. “Not ones with multiple applications; those might go to auction,” Felman says. “I would say the first ones awarded will be the ones where there is complete lack of ambiguity with respect to ownership, such as corporations with very unique names or geographic destinations with specific approval by the government and one applicant.”

Companies that are able to purchase their names as domains will likely take a gradual, years-long approach to migrating their online presence to the new domains.

“I don’t expect any large companies to immediately convert their internet presence to these new gTLDs,” Felman says. “But you may see new products and services introduced that actually capitalise” on the new domains.”

Eventually, ICANN hopes to have a rolling admissions process for new gTLDs. But realistically, it will probably be four or five years before it accepts applications for new domains after the deadline ends on April 12.